• Muhammad Ashraf Hamzah was given 9.5 years’ jail, while Sadagopan Premnath was jailed six years and eight months
• The cases of several other Shell employees, including the alleged masterminds, are pending
• More than 300,000 tons of gas oil worth at least S$200 million were siphoned
• The police began investigating when a Shell representative filed a report in August 2017

SINGAPORE — Two former employees from Shell Eastern Petroleum were sentenced to jail terms on Monday (July 5) over the largest heist of marine gas oil in Singapore to date, amounting to hundreds and millions of dollars.

The misappropriation of gas oil by two syndicates of Shell employees at its biggest regional refinery, on Pulau Bukom, led to the prosecution of about a dozen employees and foreign ship captains.

More than 300,000 tons of gas oil worth at least S$200 million were siphoned. Gas oil is a type of fuel used on ships and other vessels.

Prosecutors said the offences struck “at the core of a strategic industry” and that the “sheer scale of the offending in this case is without precedent”.

Muhammad Ashraf Hamzah, a 39-year-old Singaporean also known as Acap, was sentenced to nine-and-a-half years’ jail on Monday.

The ex-process technician pleaded guilty to nine criminal breach of trust charges, as well as one charge of using nearly S$200,000 of his criminal proceeds to buy a Volvo V40 car.

He participated in the scheme from around 2010 to 2016, aiding in the misappropriation of USS$24 million (about S$33.5 million) of gas oil from 2014 to 2016. He earned at least S$700,000 for himself.

Sadagopan Premnath, an Indian national who worked as a fieldman or panel operator at Shell, was jailed for six years and eight months.

He had earlier pleaded guilty to four counts of criminal breach of trust, with another five charges taken into consideration for sentencing.

Sadagopan was involved in the scheme between 2017 and 2018, aiding in the misappropriation of US$36 million (about S$49.1 million) worth of gas oil. He received about US$150,000 from the criminal proceeds.

Both men, who were the first Shell employees to be dealt with by the courts, have not made restitution to their former employer.

They had followed instructions to open and close valves so that ships could receive the stolen gas oil without being detected.

Prosecutors said that two other Shell employees allegedly started the scheme in 2007 — Juandi Pungot, a shore loading officer from Sadagopan’s team, and Abdul Latif Ibrahim. They then recruited others over the following years.

The police began investigating when a Shell representative filed a report in August 2017, saying that the firm had suffered a loss of fuel worth about S$2.98 million in April that year.

At least two others — Vietnamese ship captain Doan Xuan Than and another ship officer, Dang Van Hanh — have been jailed for receiving between S$3.5 million and S$7.7 million of gas oil.

HOW THE SCHEME WORKED

Shortly after cooking up the plan in 2007, Juandi and Latif recruited another key participant, shore loading officer Muzaffar Ali Khan.

Shore loading officers would usually be the ones in contact with a ship captain for the sale and purchase of misappropriated gas oil.

Juandi and Muzaffar were handed more charges in February this year of bribing employees from various surveying companies with US$91,900, in order to stop them from accurately reporting the amount of gas oil loaded onto vessels.

The syndicate got away with their alleged crimes for about a decade through various methods, such as timing their thefts with the legitimate loading of gas oil and tampering with the orientation of closed-circuit television cameras.

They coordinated their activities through chat groups on mobile phones, even though they were not allowed to use their phones while on duty.

In 2013, Juandi, Muzaffar, Ashraf and a fourth employee discovered that Latif was holding on to about half of their criminal profits before splitting the remainder with them. This led to a dispute.

Latif was the primary point of contact with bunker ships willing to participate in the scheme. The operations then took a pause when he left to join another team in Shell.

However, the syndicate resumed its activities in 2014 after finding other willing vessels with Vietnamese and Greek captains, and recruited other employees into the ruse.

Juandi and Muzaffar became the team leaders from mid-2014, prosecutors told the court.

The pair and another shore loading officer, Koh Choon Wei, allegedly directed and led the embezzlement. Among other things, the trio negotiated prices, decided how profits should be distributed within the syndicate and recruited their co-conspirators.

The vessels that bought their misappropriated gas oil were mainly those belonging to a company called Prime Shipping.

Juandi allegedly gave a former surveyor, Nguyen Quoc Tuan, their team duty roster to arrange for Prime vessels to berth at the Pulau Bukom refinery when their team was on duty.

IMPACT ON SHELL

In early 2015, Shell began observing significant unidentified gas oil loss at Pulau Bukom.

A 2015 review did not turn up anything suspicious. Shell then implemented various measures to improve processes but the misappropriation continued.

In early 2017, it engaged a third-party consultant to conduct a review, but the investigation did not yield a conclusive explanation for the high losses.

It soon experienced its highest hydrocarbon loss since 2015. Shell then hired a global team of analysts, who detected the misappropriation, and a police report was made.

Shell had since taken various measures to improve its systems and processes, including developing a monitoring software to detect potential thefts.

So far, Shell has incurred about S$6 million in costs to manage the consequences of the misappropriation.

For each charge of criminal breach of trust as an employee, each man could have been jailed for up to 15 years and fined.